Tax Credit Programs
Federal Low-Income Housing Tax
Credit (LIHTC) Program
Who can apply for Low-Income
Housing Tax Credits?
Developers and owners of qualified low-income housing may
apply for Low-Income Housing Tax Credits.
- acquire, substantially rehabilitate, and/or
construct residential rental developments that provide a
percentage of affordable units for occupancy by
low-income individuals and families.
- assemble a development team (owner, development
consultant, management agent, contractor and architect)
that meets the experience and licensing requirements
established by CHFA.
- comply with
of the Internal Revenue Code, regulations,
administrative documents, and all relevant material
published by the IRS.
Please note: Before applying, developers
are encouraged to seek the assistance of a housing
consultant, an attorney and/or an accountant to verify
compliance with all LIHTC program requirements.
What types of housing
developments are eligible to receive Low-Income Housing Tax
In order to be eligible to receive Low-Income Housing Tax
Credits (LIHTC), housing developments must meet specific
criteria set forth in
Qualified Allocation Plan (QAP).
- Eligible developments must provide
residential low-income rental housing.
Projects that acquire, substantially rehabilitate, and/or
construct residential rental housing to be occupied by a
percentage of low-income individuals and families may be
eligible to receive LIHTC awards.
Conversely, hospitals, sanitariums, nursing homes,
retirement homes, mobile home parks, and life care
facilities (excluding certain Assisted Living proposals)
are not eligible for LIHTC.
- Projects must meet "Minimum
A "minimum set-aside" represents the lowest percentage
of a development's housing units that meet
HUD-defined low-income and rent restrictions
applicable to the geographic areas.
In order to be eligible for LIHTC, development owners
must agree to one of two “minimum set-aside” provisions.
- LIHTC 20-50 Minimum Set-asides - Very Low Income
20% of the development's units must be rented to
tenants earning no more than 50% of the
income (adjusted for family size) as established by HUD.
The remaining units
may be rented at market rates.
LIHTC 40-60 Minimum Set-asides
At least 40% of the development's units must be rented
to tenants earning no more than
60% of the area median income
(adjusted for family
size) as established by HUD. The remaining units may be
rented at market rates.
This set-aside requirement remains in place throughout
the compliance period of 15 years and an extended use
period, which typically totals over 30 years.
What size tax credit is a
development eligible to receive?
The amount of tax credits a development is eligible
to receive under the Low-Income Housing Tax Credit
(LIHTC) program represents a fixed percentage of certain
costs of developing low-income housing and the number of
units that will meet federal rent and income targeting
guidelines. Other factors that are considered include,
but are not limited to, the amount and source of
financing available for a project.
Generally, new construction projects and substantial
rehabilitation projects may qualify for 9% Tax Credits, as
long as they are not funded with federal Tax-Exempt Bonds
and are otherwise eligible. On the other hand, projects
that involve acquisition and substantial rehabilitation
expenditures and are funded with Tax-Exempt Bonds may only
qualify for 4% Tax Credits.
A development receives all of the tax credit equity
during the construction period, while investors claim the
tax credits annually over a ten year period. The credits
are used to reduce federal tax liability on a dollar-for-dollar basis.
How do Developers apply for Low-Income
Housing Tax Credits?
Developers may apply for Low-Income Housing Tax
Credits by submitting an electronic copy of the Consolidated
Application through Biznet.ct.gov.
What is the application
deadline for Low-Income Housing Tax Credits?
The application deadline differs depending upon the type
of LIHTC being applied for:
- 9% Low-Income Housing Tax
There is a limited pool of 9% LIHTC. This
means that developers must apply during
CHFA-specified 9% LIHTC funding rounds and
be rated and ranked based upon how well
their projects meet the priorities and
selection criteria set forth in CHFA's
Allocation Plan (QAP.) The top scoring
applicants (as judged by CHFA) are awarded
Application rounds are typically held each
year in the Fall. Notices are sent out via
e-mail blasts and a Press Release is listed
on the CHFA front page.
- 4% Low-Income Housing Tax
4% LIHTC are allocated on a
non-competitive basis to
developments that utilize Tax-Exempt Bonds
as a component of their financing. Because
4% LIHTC are awarded on a non-competitive
basis, developers may apply for 4% LIHTC at
any time. Common practice is for developers
to apply for 4% LIHTC in conjunction with
Tax-Exempt Bond financing.
News and Announcements for "Notice of
Funding Availability" bulletins advertising
periodic Tax-Exempt Bond financing
Is training available on the Low-Income Housing Tax Credit
Generally, CHFA offers LIHTC
application overview sessions providing
information regarding the LIHTC Program
and Qualified Allocation Plan updates.
Prior to the funding round each year, overview sessions will be
Announcements for Developers and Sponsors. Developers
interested in receiving email updates regarding the LIHTC
Program should contact
email@example.com to be added to our email list.
should developers know about
Low-Income Housing Tax Credits?
The following additional considerations and restrictions
apply to the LIHTC Program.
- Developments receiving Tax-Exempt Bond
financing may still be eligible for federal Tax
Developments that receive Tax-Exempt Bond financing
from local, state or federal governments may still
qualify for 4 % LIHTC awards.
- A single development can qualify for
both 9% and 4% Tax Credits.
If a development includes building acquisition, it
may be eligible for 4% acquisition tax credits in
addition to 9% tax credits for rehabilitation
- Eligible developments must make a
minimum long-term commitment to provide low-income
LIHTC requires that a development provide
low income housing for a compliance period of 15
years starting with the first year of a building’s
ten-year credit period.
- Tax Credits allocated to developments
must not exceed the amount necessary to assure the
The housing credit dollar amount allocated to a
building that is a part of a qualified low-income
housing project must not exceed the amount CHFA
determines is necessary for the financial
feasibility of the development throughout the
- The Tax Credit Period begins when a
building is placed in service or the next year.
Under LIHTC, the credit period of ten taxable years
for any building that is a part of a qualified
low-income development begins on the taxable year in
which the building is placed in service, or the
succeeding taxable year if the taxpayer chooses.
- Ten percent of all 9% Tax Credits are
reserved for non-profits.
Under LIHTC, ten percent of the tax credits
available in Connecticut are reserved exclusively
for developments sponsored by non-profit
organizations. Applicants under the non-profit
set-aside will be rated and ranked only against
other non-profit applicants.
Please direct questions and comments related to tax
credit programs to the Tax Credit Department.
Connecticut Housing Finance Authority
Attn: Multi Family Underwriting
999 West Street
Rocky Hill, Connecticut 06067
The following files and documents are related to the
Federal Low-Income Housing Tax Credit Program
- 14 |
|2015 LIHTC Reassessment Application|
2015 LIHTC Reassessment Application
|LIHTC - 2012 LIHTC 9% Applicant List|
2012 LIHTC Applicant List - This chart lists the developments which applied for 2012 9% Federal Low-Income Housing Tax Credits
|LIHTC - 2012 Qualified Allocation Plan|
On June 28, 2012, Governor Malloy approved the CHFA 2012 Qualified Allocation Plan (QAP).
2012 Applications for 9% Low-Income Housing Tax Credits will be due by 4:00 p.m. on Monday, October 1, 2012.
Please note the change in the date applications are due.
|LIHTC - 2013 Award List - 9%|
2013 Application Round LIHTC Award List - This chart lists scoring and the developments which were approved for 9% Federal Low-Income Housing Tax Credit Awards on March 27, 2014.
|LIHTC - 2013 LIHTC 9% Applicant List|
2013 LIHTC Applicant List - This chart lists the developments which applied for 9% Federal Low-Income Housing Tax Credits in 2013.
|LIHTC - 2013 Qualified Allocation Plan|
On August 16, 2013, Governor Malloy approved the CHFA 2013 Qualified Allocation Plan (QAP). This is the QAP for Connecticut as required by the federal Low-Income Housing Tax Credit ("LIHTC") Program for the allocations of housing tax credits.
Applications for 9% LIHTCs will be due by 4:00 p.m. on Monday, November 18, 2013.
|LIHTC - 2014 Award List - 9%|
2014 Application Round LIHTC Award List - This chart lists scoring and the developments which were approved for 9% Federal Low-Income Housing Tax Credit Awards on March 26, 2015.
|LIHTC - 2014 LIHTC 9% Applicant List|
2014 LIHTC Applicant List - This chart lists the developments which applied for 9% Federal Low-Income Housing Tax Credits in 2014.
|LIHTC - 2014 Qualified Allocation Plan|
On September 26, 2014, Governor Malloy approved the 2014 Qualified Application Plan (QAP). This is the QAP for Connecticut as required by the federal Low-Income Housing Tax Credit (LIHTC) Program for the allocations of housing tax credits.
Applications for the 2014 9% LIHTCs will be due by 4:00 p.m. on Monday, November 3, 2014.
|LIHTC - 2015 DRAFT Qualified Allocation Plan|
On July 31, 2015, the Connecticut Housing Finance Authority Board of Directors adopted amendments to the 2015 Qualified Allocation Plan (QAP). This QAP is now pending approval by Governor Malloy and is provided here as a DRAFT for informational purposes.
|LIHTC - Glossary of Terms|
This is a Glossary of Terms related to the Low-Income Housing Tax Credit (LIHTC) Program.
|LIHTC - Guidelines|
This is a Guideline outlining general information and the compliance process associated with the Low-Income Housing Tax Credit (LIHTC) Program.
|LIHTC - Quarterly Progress Report|
This form is submitted on a quarterly basis to report progress on a 9% Low-Income Housing Tax Credit (LIHTC) - financed development. All 9% LIHTC Quarterly Reports must be submitted to the following email address: LIHTCQuarterlyReport@chfa.org.
|Mortgagor's-LIHTC Cost Certification Workbook|
This Excel workbook is required for the completion and submission of the Mortgagors-LIHTC Cost Certification, and the Contractors Cost Certification.
- 14 |